Size and Scope of the Live Performance Industry

Introduction

Live Performance Australia (LPA) is pleased to present the results of the second ever study of the economic Size and Scope of the Australian Live Performance industry. The study, prepared by EY (formerly Ernst & Young), combines the results of the 2012 LPA Ticket Attendance and Revenue Survey with an estimation approach, to calculate the industry’s economic contribution in terms of gross output, value add and full time equivalent employment.

The study is broader in scope than the previous 2010 study (based on 2008 data), as it includes data from the Key Organisations of the Australia Council for the Arts, and regional and metropolitan venues that are members of the Australian Performing Arts Centre Association (APACA). Thanks are due to these new Survey Participants, as well as the existing cohort listed in the Appendix. With this new data, along with a growth in the existing data set, the Gross Output of the industry is now $2.5 billion.

The results show that the industry’s value add is in excess of $1.5 billion. Even with the new data sources excluded, industry value add has experienced growth of 17 per cent from $1.15 billion in 2008 to $1.3 billion in 2012. Growth has been driven by increased overall industry wages, and an estimated 21 per cent increase in the number of full time equivalent employees (to 16 745 when new data sources are excluded). The industry’s value add is significantly higher than analogous industries, including Film, Television & Digital Games ($930 million – ABS data).

In 2011, LPA partnered with APRA-AMCOS, the Australia Council for the Arts, Arts NSW and Arts Victoria to measure the economic contribution of the venue based live music industry (specifically pubs and clubs), which was calculated at $652 million. The data sets for the live music venue study and this report are mutually exclusive, and it can therefore be inferred that the total value add of the broader live performance industry is in excess of $2.1 billion.

As with the previous edition of this research, the results are presented by state and event category. NSW and Victoria continue to comprise 65 per cent of the total value of the industry in terms of industry output and value add. The study also includes new per capita analysis, which shows that NSW has the highest value add per capita at $79.79. In event category terms, Contemporary Music has the highest share of value add at nearly 37 per cent.

This is our first foray into presenting research results online – and we hope you find the digital format informative and intuitive.

Our thanks go to our research partner, EY, and Project Manager, Andrew Moon, for their efforts in compiling the study, including refining the research methodology from the previous study, and consulting with LPA Members in the development of the event profiles. We look forward to repeating this study on a regular basis as an ongoing component of our Industry Research Program.

Live Performance Industry Revenues, Expenses and surpluses by industry component

This table provides a breakdown of the economic contribution of the four components of the industry. Large scale venues and events are the largest contributor to the industry, generating 66% of the industry’s revenue.

Large scale venues and events ($ millions)

AMPAG ($ millions)

Regional and Metro Venues ($ millions)

Key Organisations ($ millions)

Total ($ millions)

As % of Total Revenue

Revenue

Box Office Income

$1,027.00

$177.90

$51.00

$6.20

$1,262.10

49.60%

Government Funding

$105.20

$164.40

$166.70

$11.00

$447.30

17.60%

Corporate sponsorship and support

$26.20

$64.80

$5.90

$3.00

$99.90

3.90%

Other*

$521.10

$63.20

$148.30

$4.00

$736.60

28.90%

Total Revenue

$1,679.50

$470.20

$371.80

$24.20

$2,545.70

100.00%

Expenses

Wages (including direct wages to performers)

$424.20

$255.60

$135.90

$11.50

$827.20

32.50%

Contract payments to performers

$457.40

$35.30

-

$1.50

$494.20

19.40%

Rent, leasing and hiring

$167.90

-

-

$0.70

$168.50

6.60%

Venue hire

$130.60

$25.40

-

$1.20

$157.20

6.20%

Travel, accommodation and vehicles

$77.10

$23.30

-

$2.80

$103.30

4.10%

Advertising, Marketing and Promotions

$97.40

$46.50

$16.60

$1.40

$162.00

6.40%

Purchases

$30.80

$10.80

-

$0.20

$41.80

1.60%

Royalty Payments

$39.10

$10.20

-

$0.30

$49.70

2.00%

Staging, Equipment & Repairs

$48.40

$8.50

$13.40

$1.80

$72.00

2.80%

Other*

$73.40

$41.40

$140.30

$2.50

$257.60

10.10%

Total Expenses

$1,546.20

$457.00

$306.20

$23.90

$2,333.30

91.70%

Operating Surplus

$133.30

$13.20

65.6

$0.30

212.4

8.30%

*Description of revenue and expense items can be found in the Appendix

Industry Employment

Employment in this industry is difficult to measure given the high degree of casualisation and part-time nature of the workforce, and the large number of businesses that make up the industry.

Industry employment is approximated by converting the industry wage amounts estimated in the previous section into full-time equivalent (FTE) workers by applying an average labour cost per FTE staff. The average salary needs to take into account the broad range on employees in the Live Performance Industry and their varying wages, from the CEO of a major performing arts organisation to part time performers. The average weekly earnings of staff in the ‘Creative and Performing Arts Activities’ industry (as used in the previous study to estimate FTE workers) was not included in the ABS’s most recent data release. Other industry classifications were considered too broad, therefore the average wage used in the previous study was inflated to 2012 dollars (based on the wage growth for the Arts and Recreation industry). This resulted in a full time equivalent salary of $69,432.

Applying this estimate, total employment in this industry amounts to around 18,964 full-time equivalent workers.

It is important to note that while the measure of FTE employment is commonly used in industry wide studies, in reality due to the part-time nature of Live Performance Industry, it sustains a greater number of employees on a part-time or casual basis. To estimate the total number of people directly employed by the industry (i.e. full-time and part-time employees) we have applied the average weekly earnings of all employees in the industry. This resulted in an annual wage for all employees of $38,579. Applying this estimate, total employment in the industry is estimated at 34,131 workers.

It should also be noted that the analysis presented in this section is limited by the available data. The ABS does not currently collect a detailed employment survey for the Live Performance Industry. In order to provide a more robust estimate of the true average FTE wage in the industry, additional research is required, such as a detailed and comprehensive employment survey.

Industry Value Add

Industry value add is defined as the sum of all wages, income and profits generated by the industry. For the purposes of the analysis, and consistent with the previous study, the following expense items have been included as part of wages and salaries:

Wages

Contract Payments to performers (this was based on 79.6% of total contract payments to performers, with the remaining 20.4% treated as an expense associated with performers’ work that is not considered part of the industry.)

Royalty Payments to artists (this was based on 41.5% of total royalty payments, the remaining 58.5% is treated as an import expense).

As people employed in the venue hire, staging, equipment and repairs sectors specifically relating to Live Performance Events form part of the industry, we have attributed a proportion of these expenses as a wage expense. These expenses have been included as part of the industry’s wages and salaries as follows:

Staging, Equipment and Repairs expenses – 33% of these expenses attributed as Live Performance Industry wages.

On the basis of these assumptions, total industry value add to the Live Performance Industry is estimated at $1.53 billion.

Total ($ Millions)

Wages, contract payments and royalty payments

$1,241.10

Wages to venue hire, staging and equipment operations

$75.60

Live Performance Industry operating surplus

$212.40

Industry Value Add

$1,529.10

The Live Performance Industry is a unique industry comprising many diverse performances ranging from contemporary music staged at large arenas and musical theatre staged at commercial theatres to smaller theatre, opera and dance productions staged in regional and metro venues.

Many economic activities are involved in “putting on the show”, including staging, ticketing and venue hire, advertising / marketing and the actual performance by artists.

This study, titled the “Size and Scope of the Live Performance Industry 2012”, is an update of the first industry wide study commissioned by LPA and undertaken by Ernst & Young (EY) in 2010 (using 2008 data).

In terms of its economic importance, the Live Performance Industry generated revenues of $2.55 billion during 2012.

The majority of industry income is generated through ticket sales (49.6%), with government funding representing around 18% of the industry revenue. The ratio of government funding to ticket sales varies across the industry, with the small to medium not-for-profit sector most reliant on funding from government, followed closely by regional and metro venues.

The bulk of the revenues generated by the industry are spent on people (54%), including performers and non-performing support staff such as technical crew and venue staff. Overall, the industry directly supports employment of over 18,900 full time equivalent positions (FTEs).

While the measure of FTE employment is commonly used in industry wide studies, in reality due to the seasonal nature of much work in the Live Performance Industry, the industry sustains a greater number of employees on a part-time or casual basis. Based on average weekly earnings of all employees in the industry, the estimated number of people employed by the industry is approximately 34,100 in 2012.

Total profits and wages generated by the industry (i.e., the “Industry Value Added”), amounted to $1.53 billion.

The Live Performance Industry also generates a number of intangible benefits that are not captured in the economic metrics below. These included improved social cohesion, lifestyle improvement, diversity and increased creativity. This adds to the importance of the Live Performance Industry to Australia.

*The businesses that contribute to Creative and performing arts activities are classified in accordance with the ANZSIC industry definition and include performing arts operation (e.g. circus operation, dance and ballet company operation, musical productions and opera company operation), creative artists, musicians, writers and performers (e.g. artists, choreography services, costume designing, playwriting or screenwriting, set designing service and theatre lighting design service) and performing arts venues operation. The Live Performance Industry measure includes some elements of this measure but not all.

The Size and Scope study estimates the total size of the Live Performance Industry at $2.55 billion in output. The industry generated value add of $1.53 billion, which is greater than the film, television and digital games, heritage activities and library services sectors in Australia.

The Live Performance Industry supports a total of around 18,964 full-time equivalent positions, or 34,131 workers including full-time and part-time employees. This is greater than the 20,439 people employed in film and video as their main job.